Orange 21 Inc. announced financial results for the fourth quarter and fiscal year ended December 31, 2004.

Fiscal year 2004 net sales increased 22.5% to $33.56 million from $27.4 million for fiscal year 2003. 2004 net income was $807,304, compared to $500,097 in 2003, representing a 61% increase. For fiscal year 2004, earnings per diluted share were 16 cents on 5.0 million average shares outstanding versus 11 cents on 4.6 million average shares outstanding in 2003.

The company's net sales for the fourth quarter of 2004 were $9.5 million compared to $7.7 million in the fourth quarter of 2003, an increase of 24.6%. Net income for the fourth quarter of 2004 was approximately $722,000 versus a net loss of approximately $110,000 in the fourth quarter of 2003. Earnings per diluted share for the fourth quarter of 2004 were $0.13 on 5.8 million average shares outstanding compared to a loss per share of $0.02 on 4.4 million average shares outstanding in the same period a year ago.

Cash and cash equivalents at December 31, 2004, totaled $11.5 million.

“We are very pleased with our results for the fourth quarter and 2004,” said Barry Buchholtz, Chief Executive Officer. “Our success is attributable to the continued execution of our focused strategy to leverage our brand recognition within our target market and increase market share in the premium eyewear category.”

Mr. Buchholtz continued, “We are excited about the growth opportunities for 2005 and beyond. We have already launched the Dale Earnhardt, Jr. signature sunglass series, which is being marketed under the E Eyewear brand, and we have embarked on an accelerated expansion plan in the U.S., as well as Europe.” 

ORANGE 21 INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS

In $000s                        Quarter ended          Year ended
                                 December 31,          December 31,
                             -------------------- --------------------

                                  2003      2004       2003      2004
                             -------------------- --------------------

Net sales                       $7,652    $9,535    $27,404   $33,563
Cost of sales                    4,048     4,600     13,186    15,530
                             -------------------- --------------------

Gross Profit                     3,604     4,935     14,218    18,033

Operating expenses:
Sales and marketing              1,731     2,516      8,075    10,392
General and administrative       1,235     1,322      3,775     4,563
Shipping and warehousing           152       320        771       990
Research and development            11       228        264       512
                             -------------------- --------------------

Total operating expenses         3,129     4,386     12,885    16,457

Income from operations             475       549      1,333     1,576

Other income (expense)            (127)      345       (144)      165

                             -------------------- --------------------
 Income before income taxes        348       894      1,189     1,741
 Income tax provision
  (benefit)                        458       172        689       934
                             -------------------- --------------------
Net income                       $(110)     $722       $500      $807
                             ==================== ====================
Net income per share
Basic                           $(0.02)    $0.13      $0.11     $0.17
                             ==================== ====================
Diluted                         $(0.02)    $0.13      $0.11     $0.16
                             ==================== ====================
Shares used in computing net
 income per share
Basic                        4,434,067 5,424,587  4,426,056 4,643,320
                             ==================== ====================
Diluted                      4,434,067 5,754,519  4,617,609 4,973,252
                             ==================== ====================